NCPA - National Center for Policy Analysis

Employers Face Steep Insurance Increases

July 30, 1999

Health insurance costs are moving upward again. This is the second consecutive year of steep increases -- after relative stability earlier in the 1990s. Premiums have increased over two years by an average of 7 percent to 11 percent, experts report.

So employers are searching for ways to deal with these additional costs.

  • They are asking employees to pick up a greater share of the costs for brand-name prescription drugs.
  • Some are counting on employees to pay increased amounts toward their own or their dependents' coverage.
  • They are shopping around among insurers for better deals than their current insurer offers.
  • On the other hand, fearful that employees might bolt in today's tight labor market, some companies are simply picking up the extra costs themselves.

Health benefit costs per employee averaged $4,340 last year in the Northeast and $3,438 in the South. The national average was $3,827.

Source: Julie Appleby, "Diagnosis: Medical Inflation," USA Today, July 27, 1999.

 

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